Cyberattack Costs Expose the Risks of Relying Only on Insurance | ThinkSwift

When Cyber Insurance Isn’t Enough: A Real-World Wake-Up Call for Businesses

In early 2025, the City of Hamilton in Canada suffered a severe cyberattack that disabled core municipal services, disrupted operations for weeks, and exposed a harsh reality: their $5 million cyber insurance policy wasn’t enough to cover the full extent of the damage.

Why? Because key security protocols were missing, including multi-factor authentication (MFA) for several users involved in the breach. This non-compliance disqualified portions of the insurance coverage.

Unfortunately, this isn’t unique. It’s a growing issue facing businesses of all sizes across North America. Having cyber insurance is no longer a guarantee of financial protection. If your business isn't meeting minimum security requirements, your policy may not pay out when you need it most.

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Cyber Insurance Can Help, but Only If You’re Compliant

Cyber insurance is designed to help offset financial losses, but it doesn’t prevent incidents from happening. Today, most insurers require businesses to demonstrate baseline security practices, both before and after a breach.

In the case of the Canadian city, the failure to enforce MFA - now considered a basic industry standard - meant that coverage was limited. The breach caused widespread operational disruptions, reputational damage, and a recovery process that extended well beyond what insurance could support.

And MFA is just one requirement. Many policies today require businesses to also have:

  • Endpoint Detection & Response (EDR) tools in place
  • Regular security patches and software updates
  • Incident response plans and data backup policies
    Ongoing employee cybersecurity training
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Without these, a business is at risk of reduced coverage - or complete claim denial.

What Businesses Should Learn From This Incident

This attack isn’t just a warning for governments, it’s a mirror for any business, in any city, across any industry. The key takeaways?

1. Insurance is reactive. Prevention is proactive.

Waiting for an attack to occur and relying on a policy to clean it up is a high-risk approach. Without proactive security, you're not just exposed - you're potentially uninsured.

2. Compliance isn’t optional anymore.

To qualify for modern cyber insurance, your business needs to meet minimum security standards. Even basic lapses - like not enforcing MFA - can void your claim.

3. The real cost of a cyberattack goes beyond dollars.

Insurance might help with direct financial loss, but it can’t repair lost customer trust, operational downtime, or reputational fallout.

What Security Standards Are Required in 2025

Every organization should implement essential cybersecurity controls to qualify for insurance and reduce exposure to threats. These include:

  • Multi-Factor Authentication (MFA) on all accounts, especially for admins and remote access
  • Endpoint Detection & Response (EDR) to identify and isolate active threats
  • Timely patching of operating systems, apps, and firmware
  • Regular, tested backups, stored securely and offsite
  • Security awareness training for all employees
  • Documented incident response plans ready for immediate activation
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Even if you're insured, missing one of these could limit or void your coverage.

Proactive, Preventative Protection with ThinkSwift Cyber360

ThinkSwift’s Cyber360 service is built to help businesses go beyond basic protection. It’s designed to:

  • Implement and manage security controls that meet insurance standards
  • Reduce your risk exposure with real-time threat monitoring and response
  • Connect you with vetted insurance partners who understand your security posture
  • Offer ongoing compliance support and security awareness training

Cyber360 is not just about meeting minimum requirements; it's about building long-term resilience through proactive, preventative protection.

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Prevention Comes First

This recent cyberattack serves as a strong reminder that cyber insurance is only part of a complete security strategy. Without the right protections in place, a policy may fall short or not apply at all.

Today’s cyber landscape demands that businesses of every size take a more proactive stance. Security controls like MFA, EDR, and regular patching are expected.

Before you experience a breach or attempt to file a claim, take a moment to evaluate your posture:

  • Are we meeting the compliance standards set by insurers?
  • Could a cyberattack interrupt our operations for days, or even weeks?
  • Do we have a plan to minimize damage and recover quickly?

If you’re unsure, it may be time to reassess your strategy and move toward a more preventative approach.

Let’s Get Ahead of the Threat

We can help you take the next step toward smarter, more resilient cybersecurity.

Explore how Cyber360 supports prevention, compliance, and peace of mind.

Learn more about ThinkSwift Cyber360

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